Sberbank Profits Less Than Stellar

Sberbank said Monday that its third-quarter profit rose a modest 6 percent to 23.2 billion rubles ($704 million) after losses on trading, pushing the bank's shares back slightly after they gained more than 10 percent ahead of the announcement.

The country's largest lender said its nine-month net income grew 29 percent to 90.2 billion rubles ($2.7 billion), from 69.9 billion rubles in the same period last year. Net interest income for the third quarter rose 50 percent to 99 billion rubles, from 66 billion rubles a year earlier.

In a conference call with reporters, chief financial officer Anton Karamzin attributed the gains to an increase in interest income, a larger corporate loan portfolio and growth in profit on consumer transactions.

But the results were tempered by trading losses of 16.3 billion rubles ($495 million) in the first nine months and an increase in bad-debt provisions, and Karamzin said additional losses were "possible" in the fourth quarter.

"We had an opportunity to not show a large part of the losses we had from the deterioration of our securities portfolio, but we didn't think it was necessary to manipulate the results," he said, adding that the company's holdings were not "speculative."

The company's shares on the MICEX were up 8.8 percent to 16.57 rubles at 4:53 p.m, from 15.23 on Friday.

The results come after VTB, the country's second-largest bank, disappointed the market Thursday with much larger third-quarter profit losses, sending its stock to a record low.

The bank also reported 5.8 trillion rubles in assets for the nine-month period ending Oct. 1, an increase of 18 percent; its capital rose 11 percent, to 706 billion rubles from 637 billion.